House sends telecommunications, beer bills to Senate by wide margins

FRANKFORT — The House passed two high-profile pieces of legislation by wide margins Tuesday, sending bills deregulating landline telephone service and barring beer brewers from owning distributorships to the Senate.

Rep. Rick Rand, sponsor of House Bill 152, offered a floor amendment that would allow those moving to new Internet-based voice service from landline telephones 60 days to switch back, make AT&T responsible for BellSouth phone lines, protect those with health-monitoring and security devices installed at their home, and mandating that telephone exchanges as of Jan. 1 will remain in place.

After rejecting three other floor amendments, representatives ultimately approved HB 152 by a 71-25 vote in the first time the House has taken up such a measure, which had been pushed by Sen. Paul Hornback, R-Shelbyville, in recent sessions.

The new language represents a compromise between AT&T and the Communications Workers of America, he said. It’s the first time the House has voted on such a measure, and Rand said the investment in broadband technology is “vital” for Kentucky.

“Bills like this are never easy,” said Rand, D-Bedford.

“Really this bill, in my judgement, is about change, and this bill moves us forward. Business is changing. It’ll bring investment to our communities; it’ll help our communities attract employees; it’ll help home-based businesses, people that work from their homes; and as chair of the (House Appropriations and Revenue Committee) I think it’ll help spur economic growth and help our bottom line.”

HB 152 would allow telecommunications companies to cease offering landline phone service at exchanges with 15,000 or more housing units, but exchanges with fewer than 15,000 residences would be required to maintain landlines.

Rural customers could switch to Internet-based voice service with 60 days to revert back to a landline phone, but a number of lawmakers still expressed concerns about how those in lesser populated areas of the state would fare.

Two of the floor amendments voted down would have made landline service permanent in rural parts of Kentucky. Representatives in some of those areas spoke about spotty cellular telephone reception, particularly in eastern Kentucky.

Rep. Chris Harris said he doesn’t blame phone companies from wanting to move away from landline service, but he’s concerned of the impact such a move would have in the hollows of his district in Pike and Martin counties.

With the new broadband project announced by Gov. Steve Beshear last month and the Shaping Our Appalachian Region initiative, he said he’d prefer stronger regulations on the telecommunications industry.

“I’m worried, mister speaker, that what we’re doing here is we’re leaving behind that section of the state, that population that our regulations were intended to protect,” said Harris, D-Forest Hills. “Poor rural families who don’t have lobbyists, they’re relying on us to be their spokespeople, to come here to Frankfort.”

But Rep. Tom McKee cited a lack of cellular reception in some areas as a reason to support HB 152. He said he backed the bill for a small community in his district, Berry, where reception is available in one particular spot.

“It appears that that investment would be there, so as we look and think about it, the rural areas, I think, might be benefited because we’re exempted out,” said McKee, D-Cynthiana.

Beshear congratulated the House in passing the bill, which he called “an important piece of legislation that strikes a right balance between providing consumer protection and creating economic development opportunities that result from robust broadband accessibility” throughout Kentucky.

The legislation would mandate separate entities hold licenses for brewing, distributing and retail, limiting breweries from owning distributorships in a three-tiered model similar for wineries and distilleries, Stumbo said.

HB 168 comes in response to a decision in Franklin Circuit Court allowing Anheuser-Busch to have second beer distributorship in Owensboro last year, he said. The beer maker has operated a distribution center in Louisville since 1978.

Stumbo, D-Prestonsburg, said the company is a good corporate citizen, but he dismissed its claims that enacting HB 168 would cause 200 lost jobs. A company buying distributorships from Anheuser-Busch would want continuity in its staffing, he said.

The brouhaha is “an industry fight,” but businesses deserve an equal playing field, he said.

“I don’t believe that there will be a job lost in Kentucky, and I don’t believe that there’s a case to that extent,” Stumbo said. “What I believe we can do is create a uniform, equal system where everybody plays by the same rules.”

Damon Williams, director of sales and marketing for Anheuser-Busch, said the company is “very disappointed in the legislators who voted to jeopardize 200 Kentucky jobs” as it turns its focus to the Senate.

“We will continue to fight this legislation in the Senate, where we believe senators will see the importance of property rights, the free market, and not upending Kentucky’s successful beer distribution system for a tiny number of greedy special interests,” Williams said in a statement.

Some tried to protect Anheuser-Busch’s distributorships in Kentucky before the final vote. Rep. Adam Koenig offered a floor amendment that would have grandfathered the beer maker’s distribution licenses. He said the move would send “a bad message” to entities looking to invest in Kentucky.

“I believe that it’s quite similar to eminent domain in that we’re taking someone’s property but there’s no public benefit for it in the traditional sense,” said Koenig, R-Erlanger. “… I’m trying to find a way to vote for your bill, and I think many of you agree that taking away someone’s business such as this is really not our role as a legislature.”

Stumbo called the proposal “flawed” before the floor amendment’s 43-45 defeat.